FY’16 Preliminary Financial Results & FY’17-19 Plan January 31 st , 2017
FY’16 Preliminary Financial Results & FY’17-19 Plan
January 31st, 2017
2 FY’16 Preliminary Financial Results &
FY’17-19 Plan Oscar Cicchetti, Rafael Perrino
Safe Harbor
This presentation contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of
1995. These statements appear in a number of places in this presentation and include statements regarding the intent, belief or current expectations
of the customer base, estimates regarding future growth of the business, market share, financial results and other aspects of the activities and
situations relating to Infrastrutture Wireless Italiane S.p.A. (INWIT). Such forward-looking statements are not guarantees of future performance and
involve risks and uncertainties, and actual results may differ materially from those projected or implied in the forward-looking statements as a result of
various factors. Consequently, INWIT makes no representation, whether expressed or implied, as to the conformity of the actual results with those
projected in the forward-looking statements.
Forward-looking information is based on certain key assumptions which we believe to be reasonable as of the date hereof, but forward-looking
information by its nature involves risks and uncertainties, which are outside our control, and could significantly affect expected results. Analysts and
investors are cautioned not to place undue reliance on those forward-looking statements, which speak only as of the date of this presentation. INWIT
undertakes no obligation to publicly release the results of any review to these forward-looking statements which may be made to reflect events and
circumstances after the date of this presentation, including, without limitation, changes to INWIT business or acquisition strategy or planned capital
expenditures or to reflect the occurrence of unanticipated events.
Inwit FY’16 and 4Q’16 financial information included in this presentation is taken from Inwit Interim Financial Statement at December 31, 2016,
drafted in compliance with the International Financial Reporting Standards, issued by the International Accounting Standards Board and endorsed by
the European Union (designated as “IFRS”). Such interim financial statements are unaudited.
12m PF is the annualized value of the reported 9m 2015 results, calculated multiplying the reported result by 12/9. For the 3-month 2014 financial
data (hereafter “2014 Avg Quarter”), included in this presentation for comparative purposes, Pro-Forma data is reported when historical data is not
available. In the latter case, for reconciliation purposes, the average quarter for FY’14 PF data has been calculated as 25% of Pro-Forma data
pertaining to the IPO Prospectus and was determined as historical data plus adjustments, as if the Transaction had virtually taken place on January 1,
2014.
It is to be pointed out that this Company was incorporated on January 14, 2015 and started its operations on April 1, 2015. Data pertaining to the
same period of the previous Fiscal Year (FY report as of December 31, 2015) only include 9 months of operations and therefore cannot be used for comparison purposes.
3 FY’16 Preliminary Financial Results &
FY’17-19 Plan Oscar Cicchetti, Rafael Perrino
► Efficiency plan on track: Lease reduction of -6.3% YoY:
61% projects in progress (BP target > 500 Sites)
1
Business Plan Delivery
2
Financials
► FY'16 EBITDA at €163.6 mln implying a 49.1% EBITDA margin
► Net Financial Position at €34.3 mln
3
Business Acceleration
28% projects in progress (BP target > 4k Remote Units)
10% projects in progress (BP target > 1k connections)
FY’16 Preliminary
Financial Results
Tenancy Ratio
1.72x
FY’16
EBITDA GROWTH
+13%
FY’16 YoY
Investment IRR
>10%
On EXPANSION CAPEX
► New sites:
► Small Cells:
► Backhauling:
► Appealing asset confirmed: FY'16 revenue growth at +4.6% YoY
Double-digit growth fully on track
► FY’16 CAPEX €43.6 mln
4 FY’16 Preliminary Financial Results &
FY’17-19 Plan Oscar Cicchetti, Rafael Perrino
Business Plan Delivery Oscar Cicchetti – CEO Rafael Perrino – CFO
FY’16 Preliminary Financial Results
5 FY’16 Preliminary Financial Results &
FY’17-19 Plan Oscar Cicchetti, Rafael Perrino
253.02.3
78.2333.5
TIM(MSA)
New Sites OLOs Total
Eu
ro M
ln
Revenue growth delivered
The information reported above refers to the preliminary financial statement as of December 31, 2016
1. MSA = Master Service Agreement with TIM on the existing sites
2. OLOs Includes some one-off fees, due to installation services
3. When available Historical value is reported. Failing to do so, Pro-Forma data is reported.
FY’16 Revenues
FY’15
Pro-forma
61.0 314.0 253.0
65.6 253.3 318.9
0
0
1
FY’14
Pro-forma
Growth
Growth - n.a.
- n.a.
3
~150 Sites built and
up & running
20.7 84.7 63.3 0.8 4Q’16
(Includes TIM & OLOs contributions)
2
+19.2%
+28.2%
+4.6%
+6.2%
3
6 FY’16 Preliminary Financial Results &
FY’17-19 Plan Oscar Cicchetti, Rafael Perrino
11.2
11.1
FY'15 FY'16
# S
ite
s (
k)
6.3
7.1
0.8
1.3
7.1
8.4
FY'15 FY'16
# T
ena
nts
(k
)
New tenants fuelling tenancy ratio increase
1. The organic base Tenancy Ratio has been determined without including the sites currently being dismantled
Sites “on air”
+18% YoY
PF’14 4Q’15 2Q’16
Tenancy Ratio1
► 1.3k Additional Tenants other than TIM in FY’16 (vs 0.8k in 2015)
~ 0.7k contractualized in MSA
(in line with the annual target – total since 2015 ~1.5k –
another ~ 1 k to come by 2018)
~ 0.4k new tenants besides those contractualized
(other MNOs & Wireless Local Loop operators)
~ 0.2k IoT tenants hosted in our network
4Q’16 2Q’15
+63%
YoY
New
Tenants
New Sites
“on air”
BoP Sites
Sites dismantled
or being dismantled
0.07 0.08
- 0.3 - 0.2
11.5 11.2
Tenants
BoP
Tenants other than TIM
7 FY’16 Preliminary Financial Results &
FY’17-19 Plan Oscar Cicchetti, Rafael Perrino
141.2
22.16.6 169.9
GroundLease
OtherOperating Expenses
Personnel Total OPEX
Eu
ro M
ln
FY’16 Operating Expenses
Additional efficiency secured
174.7 150.7 5.1
179.4 154.4 4.3
The information reported above refers to the preliminary financial statement as of December 31, 2016
When available Historical value is reported. In failing to so, Pro Forma data is reported.
-6.3% +29.4%
-8.5% +53.5%
-2.7%
-5.3%
19.0
20.7
+16.3%
+6.8%
Impacted by:
(-) Efficiency on Ground Lease
(-) Discount on lease contract with TIM (+) Ground lease cost ~150 of new sites
Headcount
1.9 42.5 34.6 6.0
70 18 88
FY'15 2016 increase FY'16
# P
eo
ple
FY’15
Pro-forma
FY’14
Pro-forma
Growth
Growth
1
4Q’16
1
8 FY’16 Preliminary Financial Results &
FY’17-19 Plan Oscar Cicchetti, Rafael Perrino
0.1
0.1
0.1
0.1
0.05
FY'15 1Q'16 2Q'16 3Q'16 4Q'16
Sites (k)
2.0
0.2
0.2
0.2
0.3
FY'15 1Q'16 2Q'16 3Q'16 4Q'16
Sites (k)
Lease cost-reduction plan on track
~ 9k
~ 1.4k
1.3/1.5k
Decommissioning
Renegotiation
Acquisition ~ 0.3k
FY’15-18
Target
~ 0.4k sites have been fully dismantled in
2016:
• Write off
• Cash out
Total sites
~ 0.9k sites renegotiated in 2016:
• 0.6k pure renegotiation (10-30% discount)
• 0.3k cash advance (30-40% discount)
~0.3k contract signed in 2016
(considering both land acquisition and
long-term right of usage of rooftop)
~ 0.9k
FY’15-18
Target
~ 3.3k
Acq.
2016
To
be d
one
Ren.
2016
Negotia
ble
D
ism
.
2016
To
be d
one
~ 2.0k
~ 1.0k
~ 0.4k
~ 0.9k
«Risk-Free» action:
part of MSA obligation
Historical
evolution
0.1
0.1
0.1
0.1
0.1
FY'15 1Q'16 2Q'16 3Q'16 4Q'16
Sites (k)
FY’16 = ~ 0.4k sites
FY’16 = ~ 0.9k sites
FY’16 = ~ 0.3k sites
~
~
~
~ 0.1k Acq.
2015
~ 0.1k
Dis
m.
2015
Ren.
2015
~ ~
~
~ ~
~ ~
~
~
~
~
~
9 FY’16 Preliminary Financial Results &
FY’17-19 Plan Oscar Cicchetti, Rafael Perrino
6% 4% 0%
Business Acceleration achievements
New sites Small cells Backhauling
> 500 New sites by 2018
> 4k > 1.0k Connections by 2018 Remote Units by 2018
As is
% Sites % Remote Units % Backhauling connections
27%
21%
13%
16%
9%
3%
Ta
rge
t
Projects
in progress
Requested
Targeted under
Negotiation
Ready /
Under
construction
FY16 FY17 FY18
Euro
Mln
10% projects
in
progress
61% projects
in
progress
Capex
28% projects
in
progress
Pla
n
EBITDA Trend
FY16 FY17 FY18
Euro
Mln
Capex EBITDA Trend Capex EBITDA Trend
FY16 FY17 FY18
Euro
Mln
10 FY’16 Preliminary Financial Results &
FY’17-19 Plan Oscar Cicchetti, Rafael Perrino
14.5
14.2
13.9
13.6 13.5 13.413.2
12.9
2014 PFAvg
Quarter
2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16
Euro
k
Consistent and positive KPIs trajectory
OLOs & New Sites Revenues Average Lease cost per site
30%
Average Annual PF1 Lease Cost
1. The Annual PF Lease Cost is calculated based on the ground lease portfolio of contracts as of December 31, 2016 by including the full economic impact of
all renegotiations, cash advance, acquisitions and long-term rights of usage achieved during the quarter.
► Contractualized increase on track
► Commercial results (other MNOs, WLL Operators, IoT)
better than expected
► Renegotiations and cash advance on track
► Acquisition and long-term right of usage are taking off
15.3 15.716.5 17.1
18.219.3 19.9
20.7
0.2
0.60.7
0.8
15.3 15.7
16.517.1
18.4
19.920.6
21.5
2014 PFAvg
Quarter
2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16
Euro
mln
OLOs Rev New Sites Rev
11 FY’16 Preliminary Financial Results &
FY’17-19 Plan Oscar Cicchetti, Rafael Perrino
Financials Oscar Cicchetti – CEO Rafael Perrino – CFO
FY’16 Preliminary Financial Results
12 FY’16 Preliminary Financial Results &
FY’17-19 Plan Oscar Cicchetti, Rafael Perrino
Sound and positive economic trends on all metrics
Reported Revenues
TIM-MSA: stable as per
contract
OLOs: growth (19.2%)
driven by co-tenancy increase.
New Sites: driven by demand
Our business model stability is reflected
in a solid P&L performance
FY’16 YoY Reported EBITDA
+13%
FY’16 YoY
+5%
Reported Opex
FY’16 YoY
-3%
Brief Financial Review on FY’16
results
1. OLOs Include some one-off fees, due to installation services
2. The information reported refers to the preliminary financial statement as of December 31, 2016
Lease Cost: achieved
-6.3%, despite increase due
to new sites lease costs
4Q'15 4Q'16 YoYFY'15
Pro-formaFY'16 YoY
Revenues 80.4 84.7 5.3% 318.9 333.5 4.6%
TIM - MSA 63.3 63.3 - 253.3 253.0 -
3rd-party rev 1
17.1 20.7 21.1% 65.6 78.2 19.2%
New Sites - 0.8 n.a. - 2.3 n.a.
OPEX (43.3) (42.5) (1.9%) (174.7) (169.9) (2.7%)
Lease Costs (37.1) (34.6) (6.7%) (150.7) (141.2) (6.3%)
Other Operating Costs (4.9) (6.0) 21.8% (19.0) (22.1) 16.3%
Personnel Costs (1.3) (1.9) 44.1% (5.1) (6.6) 29.4%
EBITDA 37.1 42.2 13.7% 144.3 163.6 13.4%
13 FY’16 Preliminary Financial Results &
FY’17-19 Plan Oscar Cicchetti, Rafael Perrino
Profit & Loss Highlights – FY’16
1. The information reported refers to the preliminary financial statement as of December 31, 2016.
FY’15
Pro-forma 144.3 318.9 174.7
Growth +4.6% -2.7% +13.4%
FY’14
Pro-forma
Growth
134.6 314.0 179.4
+6.2% -5.3% +21.5%
333.5 169.9
163.6
Revenues Opex EBITDA
Euro
mln
Revenues
79.0 79.8 80.481.7
83.2 83.9 84.7
2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16
Euro
mln
Opex
EBITDA
(44.0) (43.6) (43.3)(42.8) (42.4) (42.2) (42.5)
2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16
Euro
mln
34.9 36.2 37.138.9
40.8 41.7 42.2
2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16
Euro
mln
14 FY’16 Preliminary Financial Results &
FY’17-19 Plan Oscar Cicchetti, Rafael Perrino
1.55x
1.59x
1.62x
1.67x
1.72x
2014 PF 2Q'15 4Q'15 2Q'16 4Q'16
Base Efficiency Plan Tenancy increase Tenancy ratio
Building a growing EBITDA Margin
Leverage on EBITDA1
Efficiency Plan
0.9% 1.9% 2.9%
Tenancy Increase
0.4% 1.3% 3.2%
44.2%
46.1%
Contractualized on track
Commercial better than expected
Site portfolio optimization
Ground Lease Renegotiations
1. The impact of the Efficiency Plan on the EBITDA is calculated as the difference between the EBITDA Margin of the quarter and the
same EBITDA Margin calculated based on 2014 PF €42.9 mln Opex. The impact of Tenancy Increase has been calculated as the
difference between the EBITDA Margin of the quarter and the base EBITDA Margin which has been chosen as the EBITDA Margin
of 3Q'15
49.0%
FY’16: 49.1%
FY’15: 45.2%
42.9%
3.1%
3.7%
49.8%
15 FY’16 Preliminary Financial Results &
FY’17-19 Plan Oscar Cicchetti, Rafael Perrino
144.3
+13.4%
12.5
+248.8%
131.8
-9.0%
Proxy Cash Flow – FY’16
1. Organic Cash Conversion = (EBITDA – CapEx) / EBITDA. Capex does not include M&A investments nor Expansion Capex
2. The information reported above refers to the preliminary financial statement as of December 31, 2016.
3. OpFCF = EBITDA – CAPEX (including CAPEX for Brescia acquisition)
Organic Cash conversion1
97%
Expansion Capex
(Land acquisition, New Sites
Small Cells & Others)
Investments
- 30.2 mln €
Ordinary Capex (Maintenance)
- 5.1 mln €
Brescia Acquisition - 8.3 mln €
Ordinary Capex
on Sales 1.5%
163.6
43.6
120.0
EBITDA CapEx OpFCF
Eu
ro M
ln
FY’15
Pro-forma
Growth
48.0
13.7
34.3
NFP Jan 16 FCF NFP Dec 16
Eu
ro M
ln
Capex
FCF Highlights
- 43.6 mln €
Tax Cash-Out - 54.6 mln €
Dividends - 56.7 mln €
3
FY’16
Net Debt / EBITDA
0.2x FY’16
134.6
+21.5%
5
+772.0%
129.6
-7.4%
FY’14
Pro-forma
Growth
16 FY’16 Preliminary Financial Results &
FY’17-19 Plan Oscar Cicchetti, Rafael Perrino
Plan Oscar Cicchetti – CEO Rafael Perrino – CFO
FY’16 Preliminary Financial Results
17 FY’16 Preliminary Financial Results &
FY’17-19 Plan Oscar Cicchetti, Rafael Perrino
2017-19 Plan: continuity with 2016-18 plan
Passive infrastructure business
with high barriers to entry
High quality sites (first mover adv.)
and long-term contracts (80% of revs)
Not vulnerable to inflation
and interest-rate increases
Low Risk Asset
INVESTING with a strict DOUBLE-DIGIT IRR POLICY
EBITDA GROWTH
+13%
FY’16 YoY
Risk-free
Upside
CPI increase + sharing agreement
(new tenants and site dismantling)
Investment-
Related New business with double -digit IRR:
Small cells, new sites & backhauling
Execution-
Related 2015: IPO
“LOW TEENS” YEARLY EBITDA GROWTH
FURTHER UPSIDE
New tenants and efficiency
Plan 16-18
2019 onwards
THE FOUNDATIONS
Increased in
July 2016
18 FY’16 Preliminary Financial Results &
FY’17-19 Plan Oscar Cicchetti, Rafael Perrino
New Projects: targets, IRR and capex requirements
New
sites
Small
cells
Land
acquisition
Back
hauling
> 500 New sites
> 4k Remote Units
1.3k - 1.5k Land to be
acquired
> 1k Sites
connected
Target Unitary CAPEX
€10-20k
per remote unit
€70-80k
per site acquired
€35-50k
per site
€50-75k
per new site
15-22k€
REV per site
3-7k€
REV per remote unit
8-10k€ (equivalent)
REV per site
(limited opex)
9-11k€ per site
Lease Cost Savings
DOUBLE-DIGIT
IRR: CAPEX1
~ 300 mln €
Keep Investing
with similar pace
confirming
double-digit IRR
61%
28%
10%
31%
2016-2018 Plan Impacts
P&L Upside Projects in Progress
2019
onwards
Additional EBITDA1
>> 30 mln €
Flexible to catch the demand wherever it moves, while preserving our double-digit IRR policy
1. CAPEX refer to the 3-year total cumulative Capex for 2016-2018. Additional EBITDA is the run-rate impact of our actions
19 FY’16 Preliminary Financial Results &
FY’17-19 Plan Oscar Cicchetti, Rafael Perrino
+
Today 2018 E Longer Term
TOTAL
MARKET
TOTAL
MARKET
1.3/1.5 k
TOTAL
MARKET
> 30%
Land Acquisition
Direct ownership
Backhauling
MAINLY
VOICE
4G
DATA
Copper
Fiber
Today 2018 E Longer Term
TOTAL
MARKET
< 40% 0
TOTAL
MARKET
> 50%
>1k
TOTAL
MARKET
> 90%
3k
% site or # site with fiber backhauling
Today 2018 E Longer Term
TOTAL
MARKET
45k
~11k
TOTAL
MARKET
Sites
# site New
sites
Dismantled
sites
TOTAL
MARKET
- + -
Italian Market Evolution & Inwit role: Sites, Lands, Backhauling
~11k ~11k
New
sites
Dismantled
sites
Few hundreds
7k sites are connected with Fiber,
but not operated by INWIT
► Densification
► Site dismantling
Main pros
► Lease cost saving
► No issues in renewals
► No ISTAT increase
► No sublease
20 FY’16 Preliminary Financial Results &
FY’17-19 Plan Oscar Cicchetti, Rafael Perrino
Italian Market Evolution & Inwit role: Small Cells
Italian Mobile Data Traffic
Exabytes per Month
Hundreds > 4k
remote units
Few
Hundreds
1. Sources: Markets and Markets - IDC and Analisys Mason, Ericsson Mobility Report (Nov-14) + CISCO VNI 2016 Report (nov-2016), themobileworld.com
DAS 4G Small Cells
Multi - tenants Mono - tenants
Public spaces
(university, hospital, …)
Private spaces (offices, ..)
and outdoor coverage
Mainly
shared
Mainly
exclusive
Double Digit
IRR
REV
3-7k€
per remote unit
1 2
Approach
Return on
investments
CAPEX
10k€ / 20k€
per remote unit
EBITDA
Margin:
Not dilutive
Providers:
Big players
Simple Equipment
Small Providers
Fiber from BTS Hotel
to remote units Connected to the
core network
TOTAL
MARKET
TOTAL
MARKET
TOTAL
MARKET
>> 200 k
Remote Units
Few
Thousands
Today 2018 E Longer Term
Italian Market
21 FY’16 Preliminary Financial Results &
FY’17-19 Plan Oscar Cicchetti, Rafael Perrino
2017-19 Plan: 2019 will follow the main 2016-18 trend
Low-Risk Asset
INVESTING with DOUBLE-DIGIT IRR
2015: IPO
“LOW TEENS” YEARLY EBITDA GROWTH
FURTHER UPSIDE
Preserving our
LOW TEENS EBITDA growth +
Keep Investing
in additional business
+
Financial Flexibility
Plan 16-18
2019 onwards
More than 25% EBITDA
deriving from new business
KEEP INVESTING maintaining GROWTH
THE FOUNDATIONS